The money market rate increased significantly last
week as the Overnight rate (OVN) and Open Buy Back (OBB) rose to 17.36% and
16.57% respectively. Consequently, the average money market rate rose by 10.76%
to settle at 16.97% due to decreased system liquidity to close at cN32bn as CBN
aggressively mop up liquidity during the week with three OMO auction.

Inflow for the week included: OMO bills maturity of
cN443.76bn. Outflow included: OMO sales of c161.08bn on Monday cN371.56bn on
Thursday, cN119.92bn on Friday and Wholesale, Invisible and SME FX auction of
$210mn.

We expect rates to drop
significantly this week as anticipated inflow from October FAAC payments and
OMO maturities is expected to hit the system.

Instrument

23/11/2018

30/11/2018

Change

OBB

5.83%

16.57%

+10.74%

OVN

6.58%

17.36%

+10.78%

Source: Anchoria AM Research, FMDQ
OTC

Forex: USD/NGN

The CBN Official rate continued on its upward trend to
close at N306.80/$, a 0.02% increase while the rate in the Investors and
Exporters’ FX Window fell by 0.16% to close at N364.10/$. The rate at the
Bureau De Change rose significantly to close at N370.50/$ from N364.50/$ last
week as demand pressure was more pronounced in the market.

In response to the demand pressure, the Central Bank
of Nigeria introduced a special intervention FX Cash Sales to Bureau De Change.
In addition to existing market days (Monday, Wednesday and Friday), the CBN
will sell $15,000 per BDC on Thursday, commencing from Thursday, 06 December,
2018.

23/11/2018

30/11/2018

Change

CBN Official Rate

306.75

306.80

+0.02%

I&E FX Window

364.70

364.10

-0.16%

Everdon BDC Rate

364.50

370.50

+1.65%

Source: Anchoria AM Research, FMDQ
OTC

Commodities

The Brent Crude oil rose by 0.15% to close
at $58.50 per barrel after a report that Russia accepts the need to cut
production in conjunction with OPEC while the WTI Crude Oil fell by 1.00% to
close at $50.93 per barrel. This represents eight weeks of a consecutive fall
in the prices of the Crude Oil futures (WTI).

Fixed Income

Bond

Following the OMO auction that witnessed a hike in
rates to a year high of 15.00%, Bond market traded on a bearish note to close
the week at an average yield of 15.47%, 7bps higher than the previous week
yield. The sell offs witnessed was well pronounced across the long maturities
most especially 2034s.

We expect the bearish sentiments to persist in the
bond markets as market adjusts to the new rates from the T-bills and OMO auction
last week.

Secondary Market

Source: Anchoria AM Research, FMDQ
OTC

Treasury Bills

Due to decrease in system liquidity and increase in
spot rate during the week, the treasury bills market traded on a bearish note.
Consequently, the average yield rose by 68bps to close the week at 14.75%.
Market activities were relatively active as the value of transactions rose to
N1.26 trillion from N1.10 trillion in the previous week.